Making Tax Digital for landlords is one of the most significant tax changes affecting those who let property from April 2026.
If you are a landlord completing a Self Assessment tax return, the way you report property income to HMRC is about to change. Making Tax Digital for Income Tax replaces the traditional annual return with digital record keeping and quarterly reporting submitted through HMRC compatible software.
This is one of several regulatory developments affecting the private rented sector, alongside ongoing EPC requirements and wider compliance reforms.
This article explains who is affected, what you will need to do, key deadlines, and how to avoid unnecessary penalties.
What is Making Tax Digital for Income Tax?
Making Tax Digital for Income Tax is a new system for reporting income and expenses to HMRC. If you are in scope, you will need to use software that works with Making Tax Digital to:
- Create and keep digital records of your property income and expenses
- Send quarterly updates to HMRC
- Submit your end of year final declaration (rather than completing the traditional Self Assessment return in the usual way)
HMRC does not provide the software itself, so landlords must use an authorised product that is compatible with the Making Tax Digital system.
When does Making Tax Digital start for landlords?
Making Tax Digital for Income Tax is being introduced in phases:
- From 6 April 2026: landlords (and sole traders) with qualifying income over £50,000
- From April 2027: qualifying income over £30,000
- From April 2028: qualifying income over £20,000
“Qualifying income” relates to your income from self-employment and property. If you are close to the threshold, it is worth checking HMRC guidance and confirming with your accountant if and when you will need to take action.
What will landlords need to do under Making Tax Digital?
If you are in scope from April 2026, the practical requirements to be aware of, and take action upon, in the coming months are:
Keep digital records
You will need to maintain digital records of your property income and expenses, using compatible software.
Send quarterly updates
You will submit updates four times a year. These are reporting updates, not tax payments.
HMRC confirms that if you need to use Making Tax Digital from 6 April 2026, it will not apply penalty points for late quarterly updates for the first 12 months.
Submit your final declaration
At the end of the tax year you will submit a final declaration by 31 January following the end of the tax year, as part of the Making Tax Digital process.
Pay tax as usual
Quarterly updates do not automatically mean you pay tax quarterly. Tax payment dates remain aligned with the existing Self Assessment approach, including 31 January and (where relevant) 31 July payments on account.
What are the penalties for noncompliance under Making Tax Digital?
Making Tax Digital introduces a penalty points system for missed deadlines, with financial penalties once a threshold is reached.
Late submissions and late payment
HMRC has published details of the points based approach and the fixed penalty model for those who repeatedly miss deadlines.
For landlords joining in April 2026, the key transitional point is that penalty points will not be applied for late quarterly updates during the first 12 months, but penalty points can still apply for other missed requirements such as end of year obligations.
Failure to use compatible software
HMRC makes clear that submissions must be made via compatible software. You cannot simply submit quarterly updates through a standard online form without using an approved product.
Keeping digital contact details up to date
Recent reporting has highlighted proposals and debate around penalties linked to failing to keep digital contact details up to date, with a figure of up to £1,000 referenced in industry coverage.
Simply put, you must keep your contact information up to date – if you change your phone number or email address, you have to ensure your MTD information is updated to reflect new contact details.
Can landlords be exempt from Making Tax Digital?
Not everyone will be able to use digital systems, and HMRC recognises this.
If you are digitally excluded, you may be able to apply for an exemption. HMRC sets out how and when to apply, and notes that you should apply before you are required to join.
If you think this could apply to you, do not leave it late. Exemptions are not automatic, and evidence may be required.
Practical steps for landlords to take now
If you want to stay ahead of Making Tax Digital for landlords, focus on readiness rather than panic.
List of actions for landlords
1 – Confirm whether you are in scope from April 2026
Review your 2024 to 2025 figures and confirm qualifying income position.
2 – Speak to your accountant early
Software choice, bookkeeping approach, and who submits what (you or your agent) needs to be decided before the first quarterly update is due.
3 – Choose compatible software and set it up properly
Allow time to connect bank feeds, set up categories, and build a repeatable process. HMRC’s campaign hub links to software guidance and timelines.
4 – Get your record keeping house in order
The biggest friction is rarely the submission itself. It is receipts, categorisation, and keeping expenses tidy.
5 – Check and maintain your contact details
Keep your digital contact details updated to reduce avoidable compliance risk.
Making Tax Digital for landlords – The questions we’re hearing
Will I have to pay tax quarterly?
No. Quarterly updates are reporting requirements. Tax payment deadlines remain aligned with the existing Self Assessment timetable.
What happens if I miss a quarterly submission?
HMRC operates a points based system. However, penalty points will not be applied for late quarterly updates in the first 12 months from April 2026 whilst landlords adjust to the new set up.
Does this apply to limited company landlords?
No, Making Tax Digital for Income Tax only applies to individuals – Limited companies are subject to separate corporation tax reporting requirements.
Guidance for landlords on Making Tax Digital for Income Tax
Making Tax Digital for Income Tax is a structural shift for landlords, particularly those used to dealing with tax once a year.
The most effective approach is to treat April 2026 as an operational shift. Put the right systems in place early, understand your reporting obligations and seek advice before deadlines become a problem.
Making Tax Digital for Income Tax represents a structural shift in how landlords manage their tax reporting.
For those already navigating compliance, licensing and energy efficiency requirements, this is another area that requires forward planning rather than last minute reaction.
Please note – this article provides general guidance only and should not be treated as tax advice.
For landlords operating in Chiswick, Hammersmith, Shepherd’s Bush and across West London, this sits alongside wider regulatory changes already reshaping the private rented sector.
